Haywood threatens lawsuits against lodging owners over room tax

Businesses skirting Haywood County’s room tax laws should pay up or they could soon find themselves slapped with a lawsuit.

The Haywood County Tourism Development Authority plans to sue six accommodation owners who have repeatedly and openly neglected to pay the county’s 4 percent tax on overnight lodging, announced Executive Director Lynn Collins at the tourism board’s meeting last week.

“That will set an example,” Collins said. “Let them know that we actually are serious about it.”

Some businesses owe more than three years worth of room taxes, Collins said, and some have openly stated their defiance of the law.

Collins added that she sees places that are not paying the lodging tax with vacancy signs welcoming people. They are clearly doing business but either haven’t been charging the tax in the first place or have been pocketing it instead of remitting it to the county.

The tax is supposed to be tacked on to a tourist’s bill when they stay in a hotel, bed and breakfast or vacation home rental. Lodging owners then remit the tax they collect to the county on a monthly basis.

The tourism agency has not yet chosen which six taxpayers, or rather non-taxpayers, it will sue. But, Collins said it will go after “the most blatantly delinquent” properties.

“(Taking legal action) is the only thing you can do now,” said Al Matthews, Canton town manager and a member of the tourism board.

However, the board will continue to look for ways, such as changing legislation that would give them the authority to impose further sanctions, to bring more people into compliance. Currently, the authority has few options for punishing delinquent lodgers beyond lawsuits and liens.

For years, the tourism authority board has struggled with ways to bring accommodation owners into compliance. Each meeting, the board is presented with an list of people who owe overdue taxes.

“Every month we look at these penalties, and it’s the same people time after time after time,” said Marion Hamel, a tourism board member from Maggie Valley.

The revenue from the room tax is used to promote tourism in Haywood County.

In September, the tourism agency collected more than $96,000 from its 4 percent occupancy taxes — about $8,000 more than its estimated revenue for that month.

The increase is a vast improvement compared to August, when the actual amount of taxes collected came in 20 percent under the TDA’s year-to-date projections. The agency estimates it will bring in a little more than $863,000 this fiscal year.